October 30, 2016

The Pennsylvania Public Utility Commission voted unanimously
today to adopt changes to its alternative energy regulations including
controversial new limits on who can qualify for incentive payments for selling
their extra alternative energy to the grid.

Contested sections of the regulations exclude some classes
of alternative energy generators from net metering, a process that allows
electricity customers who generate power from sources like solar panels and
landfill gas to get retail rates when they make more electricity than they use.

The final version of the rules includes a new definition of
the word “utility” that was revised after an earlier definition drew complaints
from the state Independent Regulatory Review Commission, the state Attorney
General’s office and others for being so sweeping it could be construed as
prohibiting all net metering.

PUC Chairman Gladys Brown said during the meeting Thursday
that the definition was revised to address those concerns. “I believe that the
revised definition of utility is consistent with the act and is in the public
interest,” she said.

The new definition attempts to make it clearer that
companies whose primary purpose is to generate alternative energy for sale do
not qualify for net metering. The PUC has said that the benefit was only
intended for entities like homeowners and businesses that have adopted
renewable energy systems primarily to offset their own electricity needs. It
says the rules are necessary to keep everyone else’s electricity costs from
rising.

In twice rejecting earlier drafts of the regulations, the
independent regulatory review board said those cost concerns are speculative
and that the PUC had not established a compelling need for the rules.

The regulations are likely to face a swift legal challenge
from alternative energy providers, who argue that the size limits established
in the state’s alternative energy law do not include the kind of exclusions the
PUC is implementing.

A recent Commonwealth Court opinion said that the law “fully
established” who qualifies for net metering: alternative energy systems with a
capacity of up to 50 kilowatts at residential sites and up to 3 or 5 megawatts
at other locations.